Harbinger Spectrum Brands Stock
Falcone, Harbinger Sued Over Stock Swap with Spectrum
Philip Falcone was probably hoping that he could escape this year without another problem, but the hedge fund manager is now being sued by Harbinger Group investor Alan Kahn. The suit alleges that Falcone illegally took advantage of his position in the firm to put together a stock swap between his hedge fund Harbinger Capital and a small public firm that he also runs. The swap would allow Falcone to boost his stake in Harbinger Group from just above 50% to 94%.
Now he is planning to increase his stake to 94 percent from 51.6 percent by swapping 120 million newly issued shares of Harbinger for about 27.8 million shares of Spectrum Brands, a large holding in his hedge funds.
Falcone's hedge fund firm Harbinger Capital Partners oversees roughly $7 billion.
"HGI is vastly overpaying for the acquisition of assets from its majority and controlling shareholder," according to the suit, which was filed by Harbinger Group investor Alan Kahn in Delaware Chancery Court on Tuesday. Kahn sued Falcone, other directors and Harbinger Group itself. Source
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